Mobile payment trends are not the first talking points you might think of when thinking about 2020. The coronavirus has brought about many changes in the world, and brick-and-mortar and e-commerce businesses have had to adapt quickly to these shifts in terms of consumer behavior. It also includes how mobile shoppers pay when they buy products via their mobile devices.
Many e-commerce websites have seen rapid growth. The direct-to-consumer market is increasing. Extreme growth has been seen in some categories, such as groceries, home and garden, and food. It’s not clear if shoppers will go back to pre-COVID patterns with all of these changes.
These effects have enabled mobile payments and shopping to reach the next level.
Mobile payments can be used to make contactless payments, even at physical retail shops. It is a digital transaction payment that can be made using a mobile phone. It allows for fast, secure transactions that don’t require credit cards or checks. It can be used for shopping and peer-to-peer transactions, therefore making every transaction almost effortless.
So, what are the digital payment trends that we see? Let’s look at six trends in mobile payments that will be around for the long term.
- Mobile Wallets or Dominance of Mobile Wallets in Emerging Countries
Mobile wallets allow you to link your debit and credit cards to pay digitally. To activate their mobile wallet, the shopper will need to download the app on their mobile device. You will also need to link a credit or debit card. The card information is stored securely so that the shopper will need additional security measures. Common security measures include facial recognition and thumbprint authorization.
NFC, also called near-field communication or NFC, is the main technology behind mobile wallets. Near-field communication allows two devices within a few meters to communicate. NFC can be used with both your smartphone and a point of sale (POS) terminal, provided they are compatible.
As more people use smartphones, mobile wallets will likely grow in popularity. What are other reasons shoppers choose to use a mobile wallet over their smartphones?
Speedpay Pulse reports that 55% of U.S. customers believe mobile wallets offer the fastest way to pay. Mobile wallets are also popular due to their convenience. Because it uses the latest technology, a mobile wallet is convenient. The transaction is trusted and safe for the shoppers.
Shoppers are increasingly using mobile wallets. This will increase demand.
- MPOS Technology
Another trend is MPOS (mobile-point-of-sale). This device is used mostly by merchants at traditional cash registers and sale terminals. Merchants can shop anywhere they like and accept card payments from their customers.
This advanced technology allows merchants to accept payments from anywhere, wire-free. It can be used on a smartphone or tablet. This is why it is becoming increasingly popular. Merchants can work anywhere with this technology. If necessary, it can sync payment data with its existing in-store systems.
Studies show that shoppers prefer MPOS checkouts over self-service options. 70% of shoppers want more checkout options.
A variety of businesses can use MPOS technology. Large retailers like Apple use it, but local merchants can also benefit. These merchants include:
- Food truck operators
- Farmer’s market vendors
- Craft fair participants
- Coffee cart operators
- Ice cream cart owners
- Companies that offer home repair services
- Participants in trade shows
- Owners of hair salons
- The list continues…
Merchants have the advantage of having one MPOS to start with and then scaling up as demand grows. Home service providers may have only one MPOS in order to start their business. An additional MPOS is possible to be purchased if there is more demand and servicers are being hired.
MPOS can provide convenience for both the merchant as well as the customer, which led to higher customer satisfaction and increased sales. Merchants also have the opportunity to offer a quick payment solution, right at the point where shoppers make their purchase decisions.
- Contactless payments
Contactless payments, as the name suggests, allow the customer to pay online without having to contact the merchant’s point of sale system. Contactless payments can be made from your mobile device, making it extremely convenient for you.
Apple Pay, Google Pay, and Samsung Pay are the most well-known contactless payment methods. Each method has its technology and may be used differently. Apple Pay, for example, can be used after your fingerprint has been scanned and verified to open the payment. The scanner will scan your device and make the payment. To make a payment with Google Pay, you will need to download an app.
Credit cards can also be used to make contactless payments. Many cards have technology that allows shoppers to pay by waving or tapping their card above a reader. It is called a contactless card.
Contactless payments offer many benefits, not only convenience but also security. Because the card’s magnetic stripe cannot be copied, this form of payment is safer than physical debit and credit cards. Contactless payments are protected by high encryption and constant change, which makes it difficult for hackers to copy.
The payment information for a card is not stored on the phone. If the card is lost or stolen, the user can delete it.
Contactless payments are a popular method of payment for the coronavirus, particularly in the United States. Mastercard recently conducted a survey that found that 51% of Americans now use contactless payments. It is due to the convenience of not having to use a touchpad, although Americans are slower to adopt contactless technology.
- Flexible Payment Options for Shoppers or Global Consolidation of Alternative Payment Methods (APMs)
Last year’s pandemic has seen an increase in mobile payments and the consolidation of a cashless society. Covid-19 has also accelerated the shift to Carrier Billing in many markets around the world as consumers try to avoid touching payment terminals and exchanging cash. It has made DCB a global solution that is not only available in areas with low bank access but also offers global opportunities.
A Futurist Group study found that around 38% of consumers consider contactless payment to be a fundamental feature of payment. Online purchases are becoming more common on mobile devices. According to 451 Research, online purchases made on mobile devices account for 51% of total 2020 sales (USD2.4 billion), a percentage that will rise to 53% (USD2.8 trillion) in 2020 and 64% by 2025 (USD 5.2 trillion).
We can easily say that we live in a mobile-driven society, where people expect instantaneity and convenience when they make their payments.
Direct Carrier Billing has huge potential in this mobile economy. DCB allows for a secure, fast, and easy online payment flow. Users are not required to share their bank details or personal data online. It offers great opportunities for Telcos and Merchants to increase their revenue, as well as higher conversion rates.
A frictionless shopping experience is a simplified checkout process that reduces the number of steps required to pay. Users are increasingly demanding a simplified shopping experience that requires them to spend as little time as they can to complete a purchase.
This type of experience is offered by alternative mobile payment methods, such as Wallets, One-Click Payments, and Contactless). Carrier Billing is the most preferred because it allows users to register and then charge them with just one click. It reduces the payment time by 55% compared to a credit card.
- The Mass Popularity of Crypto Payments
For years, crypto lovers have been hoping for real-world applications for this decentralized currency. The most prominent of these are mainstream eCommerce payments. Businesses have started to respond to cryptocurrency payments.
Globally, businesses that offer crypto payment options in online checkouts are bound to see a rapid increase in demand over the next year. Research shows that nearly half of all businesses (48%) are determined to include crypto payments in their online checkouts as soon as possible. 53% also say they plan to add crypto to their online checkouts next year.
- The Global Rise of Instant Bank Transfers
Financial institutions can now offer various payment services through the Open Banking legislation in Europe. It includes direct transfers in banks that facilitate cross-border banking payments in real-time. There are no legal regulations for Open Banking outside of Europe; this doesn’t mean that financial services or fintech can’t build their own networks through different methods.
Fintechs and banks establish relationships that enable banking payments and bank transfers between countries like the United States, Australia, and South America. Other countries like India and Australia are also investing in such types of schemes. With the global Open Banking initiative at its disposal, the integration and expansion of cross-border instant bank payment networks into one structure will be one of the major trends in global payments by 2022.
The digital world is rapidly changing, but brick-and-mortar merchants, as well as e-commerce, must keep up with the latest payment trends. Mobile wallets and contactless payments offer seamless shopping experiences for customers as well as greater convenience. If your store is equipped with the latest wireless mobile payment technology, you can bet that more customers will shop there.